Obama's Missing Principle on the Buffett Rule

Jonathan Horn
, ContributorI cover the rhetoric of politics and business.Opinions expressed by Forbes Contributors are their own.

Pity the poor aide operating the White House Twitter account yesterday who wrote “principal” instead of “principle” in a sentence describing the Buffett Rule named for billionaire investor Warren Buffett. As the aide unwittingly suggested, a tax plan built around the circumstances of one CEO is less about principle than, well, a principal.

The tweet came on a day when President Barack Obama gave a speech dragging out the tired claim that Buffett pays a lower tax rate than his secretary. What would otherwise pass as office gossip has become the driving force behind a policy campaign for tax fairness that ever so conveniently intertwines with Obama’s reelection campaign.

Since January when former Massachusetts Governor Mitt Romney disclosed paying about 14 percent in taxes on more than $20 million of income, Obama has badgered Congress to pass a minimum tax on households earning more than a million dollars a year. The White House has branded this proposal as the Buffett Rule, but even mainstream reporters asked yesterday whether it would be better called the Romney Rule.

Either way, naming a tax after one rich private citizen makes for poor public policy. True, there is a long history of regimes passing bills that single out and strip individuals of property and privileges, but thankfully this is not America’s history.

If there is a broader problem with the wealthy not paying their fair share, why build the argument around Buffett, a man whose $44 billion fortune puts him in a class all by himself? By comparison, even Romney looks middle class.

The best answer is the most obvious one: Obama clings to the exceptional story of Buffett and his secretary precisely because it is an exception. By the White House’s own numbers, households in the top .1 percent of earners pay an average of 26 percent in taxes while middle class filers average only around 16 percent.

In his speech yesterday in Florida, Obama spoke about how “a shrinking number of people are doing really, really well,” and he would know because his aides have been combing through data to find evidence of other people in Buffett’s shoes, i.e., more speech examples. The White House recently released a report with the results. “Warren Buffett has famously stated that he pays a lower tax rate than his secretary, but as this report documents this situation is not uncommon,” the preamble reads.

Yet all the evidence that follows in the report suggests that the situation is incredibly uncommon. “The distribution of taxes paid among the 400 richest Americans is particularly striking. One out of every three in this group of the most financially fortunate Americans paid less than 15 percent of their income in taxes in 2008,” the report reads – never mind, that many of these supposed robber barons see their money taxed at the corporate level before the individual rate even kicks in.

But is one-third of 400 Americans the best that the White House could do? That comes out to 133 tax filers not paying their fair share. By some accounts, Senator Joseph McCarthy claimed to find more Communists working at the State Department.

No wonder Obama bristles at accusations of class warfare. This isn’t about class. It’s about specific people. One almost expects to see names and addresses in the White House report, so the mob can get out the pitchforks and torches.

While these 133 households are not representative of a larger problem, Obama’s tactics in this debate have been. Throughout his presidency, he has shown a dangerous tendency to personalize public issues in polarizing ways.

Consider the events of the past month: First, without having all the facts, Obama gave an emotional statement about an already emotional police investigation in Florida. Then, he disputed the Supreme Court’s right to overturn his landmark health care law with language that sounded like a direct challenge to the justices. And last week, he thrust Augusta National, the home of the annual Masters golf tournament, into the middle of the so-called war on women by calling for the private club to admit female members.